A California federal judge has signed off on a $6.4 million settlement in a putative antitrust class action accusing a group of tomato processors of engaging in a price-fixing and bid-rigging scheme that intersected with a parallel criminal investigation. U.S. District Judge Edmund F. Brennan approved the settlement in which Defendants Ingomar Packing Co., Los Gatos Tomato Products each agreed to pay millions of dollars to settle claims that their alleged collusion restrained competition in violation of federal antitrust laws by forcing purchasers to pay a higher price for processed tomato products than they would have absent the activity. In his order Judge Brennan agreed that a settlement was the best medium of relief for the purchaser Plaintiffs. He wrote:
Given the complexity of the action and related criminal and bankruptcy proceedings, the risk and expense of litigating this action through trial and possibly subsequent appeals is apparent.
Another company, SK Foods LP, the second largest processor of tomatoes for commercial use in the U.S., was forced into bankruptcy in 2009, and a year later its former CEO Scott Salyer was charged with criminal antitrust violations. In 2013 he was sentenced to six years in prison after pleading guilty to charges of racketeering and price-fixing, according to court filings.
The Plaintiffs — buyers including Four In One Company Inc. and Bruce Foods Corp., which bills itself as one of the nation’s largest private food manufacturers — filed four separate actions alleging that from as early as 2005 to at least December 2008 the tomato processors colluded to raise prices amid declining consumer demand and increasing supply. The antitrust suits were consolidated in 2009.
The settlement fund comprises two separate settlements of Ingomar and Los Gatos, each of whom are paying $3.5 million and $2.9 million, respectively, to a class of as many as 110 purchasers. The funds have been held in escrow since January pending Judge Brennan’s final approval.
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